Traffic shaping across consumer Internet service networks is absolutely happening, and for very good reason. The principal reason this is necessary is that most peer-to-peer applications will seek to fill all available capacity, essentially disregard network congestion, taking a fire-and-forget approach to sending data. It can overwhelm network infrastructure very easily.

Consumer Internet service is NOT a tier one, committed information rate service. You can not expect to have your peak data rate available to you individually at all times. It falls to your network provider to determine which traffic gets priority, and which traffic does not, when there is contention for network resources. Since peer-to-peer traffic verges on abusive of network resources, disregarding inherent contention and congestion controls, it tends to be at the top of the list of traffic that gets dropped.

All this fuss about spoofed packets is much ado about nothing. When an excessive number of flows is being generated by a particular application on a particular host, sending a TCP reset to flows that are not going to receive service is the most elegant way of terminating those flows. Face it, your 3000 BitTorrent connections are not always going to be served by your ISP, and resetting the ones that aren't going to get served is simply being blunt about it, and frankly, it is doing you a favour.

This whole tide of outrage about Comcast or Insert-ISP-Name-Here throttling peer-to-peer traffic is going to end in exactly one place. ISPs are going to have to spell out that if you want all of your traffic passed to and from your host at a certain data rate with no QoS or policing, you can pay full commercial rate for committed data rate services. Expect to pay $150/Mbps for that per month at the very least. If you want your $30, $40, $50 home Internet service your traffic is going to be shaped, full stop.

This is NOT a net neutrality issue, this is a network management, and ISP marketing issue. The EFF needs to give their head a shake, and people need to lose their sense of entitlement to run abusive network applications across a consumer broadband service.